In the 1990s, video recordings were made primarily on tapes. However, in the 2000s DVDs became increasingly popular, leading to a sharp decline in video tapes. As a result, many people who manufactured tapes lost their jobs and didn't have the skills necessary to work making DVDs. This occurrence is best consider an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) underemployment.

Question

Quizplus · Accepted Answer

Structural unemployment occurs when changes in the economy, technology or consumer preferences result in the need for a different set of skills than what some workers possess. In this case, the shift from video tapes to DVDs caused a decline in demand for video tapes, resulting in job losses for those who manufacture video tapes. As they did not possess the skills required to produce DVD's, they faced structural unemployment.

In the 1990s, Video Recordings Were Made Primarily on Tapes